VSP Capital, the San Francisco venture capital firm that broke apart two years ago — in part because of a love affair among two of its leaders, Joanna Rees and John Hamm – has settled a legal dispute with a former partner, Matt Crisp, who had accused the two leaders of wrongful conduct.
This was one of the messiest disputes we’ve seen to date at at VC firm. I wrote about it here, and found it tragic because it involved one of the few powerful female venture capitalists active in the business, Joanna Rees (see coverage of her in the early days; too bad my earlier Mercury News pieces are all now in archives).
Joanna was called an “Alley Cat” by Forbes, for her grit in pushing through to the male-dominated ranks of the VC profession, and with a career background that was completely unconventional. As word had it, she could talk a dog off a meat wagon. With the publicity beating the firm took two years ago after the legal fallout, most people would have given up. But Joanna has fought back against the allegations, has won a settlement, and is even talking about raising another fund.
In a statement sent to VentureBeat Friday, VSP Capital — led by Rees and Hamm, who have just gotten married — said that it has resolved all litigation and disputes with their former, estranged partner Crisp on “mutually-satisfactory terms.”
As part of the settlement, Crisp was forced to eat humble pie. He issued a statement essentially saying he was wrong for his statements about the couple: “This brings an end to an unfortunate episode in our lives. Having had an opportunity to explore the issues in the case and reflect upon the evidence after discovery, I regret making various statements and allegations that Ms. Rees and Mr. Hamm had engaged in theft, embezzlement and certain other wrongful conduct. Those statements turned out not to be factually based. I believe we all think that it is time to move forward with our lives and careers.”
Crisp also made an undisclosed payment to VSP to settle the suit.
Crisp’s falling out led the firm’s limited partners to withdraw their support for VSP. Crisp was considered a “key-man” in the firm’s contract with its investors, and so with him gone, investors were allowed to pull their money out. The $185 million 2005 fund was dissolved, and three companies in the firm’s portfolio were sold off.
While I covered this story in detail at the outset of the fallout three years ago, I haven’t followed the sordid details since. The case involved consideration of emails send by the various parties, intercepted between various (ex-) spouses and lovers. If you’re interested in this stuff, it’s worth checking out the story by Dan Primack over at PEHub, and then reading Joanna’s response in the comment section, where she takes him task for certain facts she said he got wrong. Primack corrects some, and responds to other points in comments.
Vince Vannelli, another partner who had also become estranged from Hamm and Rees, settled his suit earlier.